Defined methods to grow replicative cultures of normal human bronchial epithelial (NHBE) cells without serum have been developed. These cells can be subcultured several times; will undergo 35 population doublings; and have expected epithelial cell characteristics of keratin, desmosomes and blood group antigens on their cell surface. NHBE cells inoculated at clonal density will multiply with an average generation time of 28 hr; the majority of the cells are small and migratory and have few tonofilaments. Adding human whole blood-derived serum (BDS) depresses the clonal growth rate of NHBE cells in dose-dependent fashion. In contrast, 10 representative lines of human lung carcinomas either replicate poorly or fail to grow at all when inoculated at clonal density in serum-free medium. Their rates of multiplication increase in direct proportion to the amount of BDS added to the optimized medium. BDS reduces the clonal growth rate of NHBE cells by specifically inducing squamous differentiation-inducing factor in serum for NHBE cells, while TGF-beta was not growth inhibitory for malignant cells. These differential effects of TGF-beta on normal versus malignant cells are not because of lack of TGF-beta specific receptors on malignant cells.